New York City Employee Retention Credit Fraud Lawyer

The Employee Retention Credit was one of the largest federal relief programs in recent history, making billions of dollars available to businesses that kept workers on payroll during the pandemic. It also became one of the most aggressively pursued fraud targets in the history of federal tax enforcement. The IRS Criminal Investigation division, the Department of Justice, and the U.S. Attorney’s offices across the country have made New York City Employee Retention Credit fraud prosecution a stated priority, and the cases they are building are serious, document-intensive, and carry substantial exposure. If you have received a civil audit notice, a criminal investigative summons, a subpoena for business records, or if agents have made contact with your employees or accountants, you are not in a gray area anymore.

What makes ERC fraud investigations especially dangerous is the asymmetry between how the credit was claimed and how it is now being reviewed. Businesses relied on third-party promoters, payroll processors, and tax preparers who often overstated eligibility or fabricated the qualifying conditions. When the government comes back years later, the target is frequently the business owner, not the promoter who sold them the program. Federal prosecutors in the Southern and Eastern Districts of New York have demonstrated repeatedly that they are willing to bring wire fraud, tax fraud, and conspiracy charges against business owners who, in many cases, had only a partial understanding of what was actually filed on their behalf.

The gap between civil exposure and criminal jeopardy closes fast in ERC cases. An IRS audit that begins as a paperwork dispute can transform into a referral to IRS Criminal Investigation within months. Getting qualified legal representation before that transition happens is not a precaution. It is the single most consequential decision a business owner in this situation will make.

The Charges Federal Prosecutors Are Bringing in ERC Fraud Cases

• Wire Fraud: Prosecutors frequently charge ERC fraud under federal wire fraud statutes when electronic submissions, emails, or banking transactions were used in furtherance of the alleged scheme, a routine feature of any electronically filed ERC claim that makes this charge almost universally available to the government.
• Filing False Claims Against the United States: This statute targets the submission of ERC claims containing materially false statements about a business’s qualifying conditions, gross receipts decline, or the number of retained employees, and it carries significant federal sentencing exposure independent of any tax charge.
• Tax Fraud and Filing False Returns: Where the ERC claim affected the employer’s federal tax return through inflated wage deductions or misreported liabilities, prosecutors add tax fraud counts that compound sentencing calculations under the federal guidelines.
• Conspiracy: In multi-defendant cases involving business partners, accountants, or ERC promoters, conspiracy charges are layered on top of substantive counts, capturing everyone in the arrangement regardless of who actually prepared or signed the filing.
• Aiding and Abetting: Tax preparers, payroll companies, and ERC promoters who facilitated fraudulent claims face aiding and abetting liability even if they did not directly receive the credit funds, and their prosecution often precedes or accompanies charges against the business itself.
• Money Laundering: When ERC refund proceeds were deposited and then transferred, invested, or spent in ways that obscured their origin, money laundering charges become available and dramatically increase advisory guideline ranges at sentencing.
• Aggravated Identity Theft: In cases where employee names, Social Security numbers, or wage data were fabricated or misused to support fraudulent payroll records, identity theft charges carry mandatory consecutive sentences that judges cannot reduce.

What to Do If You Are Under ERC Scrutiny Right Now

The first thing to understand is what not to do. Do not call the IRS agent back without counsel present. Do not allow your accountant to respond to inquiries on your behalf without coordinating with a criminal defense attorney first. Do not produce business records in response to an informal request. The moment government investigators are asking questions about your ERC claim, those questions have a purpose, and that purpose is not to give you an opportunity to explain yourself.

Preserve everything. Bank statements, payroll records, communications with whoever prepared or promoted the ERC claim, quarterly reports, and any documentation of business disruption or revenue decline should all be secured and kept in their original, unaltered form. Deleting emails, shredding documents, or asking employees not to speak with investigators can transform a tax fraud case into an obstruction case, which carries its own federal charges and enhances sentencing exposure substantially.

Federal criminal cases in New York are prosecuted by the U.S. Attorney’s Office for the Southern District of New York, based at 1 St. Andrew’s Plaza in lower Manhattan, and the U.S. Attorney’s Office for the Eastern District of New York, located in Brooklyn at 271 Cadman Plaza East. Both offices have active ERC fraud task forces operating in coordination with IRS Criminal Investigation’s New York field office. Cases originating from civil audits conducted through the IRS’s Manhattan or Brooklyn campuses can be referred to either office depending on where the business is located and who originally processed the claim.

If you have not yet been contacted but received a large ERC refund through a third-party promoter, a voluntary disclosure or proactive compliance strategy may still be available. The IRS has issued formal guidance on ERC repayment programs, and there are limited windows in which a taxpayer can resolve civil exposure before a criminal referral occurs. Those windows are not permanent, and they require careful navigation to avoid inadvertently admitting to criminal conduct in the process of seeking civil resolution.

How These Investigations Actually Develop, and Where Defense Strategy Takes Hold

ERC fraud cases do not appear overnight. The government typically begins with data analytics, comparing ERC claims against quarterly payroll filings, SBA loan records, state unemployment data, and business licensing information. Discrepancies trigger civil examination. Civil examiners who encounter indicators of intentional fraud, fabricated records, or patterns consistent with promoter-driven schemes refer those cases to IRS Criminal Investigation. Special agents then open a parallel criminal inquiry, often while the civil audit continues, without the business owner knowing the case has crossed that line.

By the time federal agents contact employees, interview bookkeepers, or serve a grand jury subpoena, the investigation has typically been running for months. The government has already reviewed bank records obtained through summons, examined payroll processor data, and identified the promoter network involved. They often know more about the filing than the business owner does. That is not an accident. It is the design of the investigation.

Defense strategy in ERC cases has to account for this reality. On the factual side, the key questions are whether the business actually met the eligibility requirements, whether any failure to meet them was the result of good-faith reliance on a preparer’s advice, and whether the documentation that was used reflects genuine business operations or something fabricated by a third party. On the legal side, defenses based on lack of intent, advice of counsel, or the government’s failure to prove willfulness can be significant, particularly where the business owner had little direct involvement in preparing the technical aspects of the claim.

The attorney-client privilege and the Fifth Amendment right against self-incrimination become immediately relevant the moment criminal investigation is in play. Structuring who speaks to the government, what documents are produced voluntarily versus compelled through legal process, and whether any cooperation has strategic value are decisions that have to be made with full awareness of the criminal exposure. Resolving the civil liability without protecting the criminal exposure is a trap that has caught many business owners who retained tax advisors rather than criminal defense counsel.

Why The Law Offices of Jason Goldman Handles These Cases Differently

Jason Goldman spent the early part of his career as a Brooklyn prosecutor, building serious felony cases from the inside. That experience translates directly into how he approaches federal criminal investigations: he knows how investigations are structured, where they are weakest, and what prosecutors actually need before they will commit to charges. He has tried more than 25 cases to verdict and represents clients across the full spectrum of federal criminal exposure, from the first agent contact through trial and appeal.

This firm’s approach to high-stakes federal matters is built on preparation that begins before charges are ever filed. As a New York City ERC fraud attorney, Goldman’s work includes overseeing complex investigations using private investigators and forensic experts to counter-investigate the government’s theory before it hardens into an indictment. Where the facts support it, he manages the public dimensions of these cases with the same strategic precision he brings to the courtroom, coordinating with crisis communications and media contacts when exposure requires it, and keeping clients out of that same limelight when discretion serves them better.

The firm has represented corporate executives in finance, real estate, and hospitality, as well as professionals across industries who face federal criminal exposure with their liberty, licenses, and reputations on the line. For someone whose business is the subject of an ERC fraud investigation, that representation means access to a former prosecutor who reads the government’s playbook fluently and knows when to push back hard and when to negotiate from strength.

Questions About ERC Fraud Defense in New York

What is the difference between an ERC civil audit and a criminal investigation?

A civil audit is an IRS examination of whether your ERC claim was properly calculated and supported by documentation. The outcome is repayment, penalties, and interest. A criminal investigation, which may run simultaneously and is not always disclosed, seeks to determine whether fraud was committed intentionally. The standard of proof is higher, but the consequences, including incarceration, are categorically different. Many business owners don’t realize the case has become criminal until agents knock on a door or a grand jury subpoena arrives.

Can I be prosecuted even if a third-party promoter filed my ERC claim?

Yes. Federal prosecutors have consistently pursued business owners who signed returns, received refunds, or otherwise benefited from fraudulent ERC claims, even when the fraud originated with an outside promoter. The government’s theory is that the business owner had a duty to ensure the accuracy of their own tax filings. Reliance on a promoter can be a defense to willfulness, but it is a defense that requires careful development and must be built on a factual record.

Is there still time to voluntarily correct a problematic ERC claim?

There are formal and informal mechanisms for repaying ERC claims before criminal proceedings begin, including the IRS’s withdrawal and settlement programs. Whether those mechanisms are still available in a given case, and whether using them would help or hurt on the criminal side, depends entirely on how far the investigation has progressed. This is not a decision to make based on publicly available guidance alone. The specifics of your situation determine what is still on the table.

Do I need a criminal defense lawyer, or is a tax attorney enough?

A tax attorney is the right choice for purely civil ERC disputes. Once there is any indication of criminal investigation, including informal agent contact, subpoenas to your bank or accountant, or contact with your employees, a criminal defense attorney with federal experience needs to be involved immediately. Tax counsel and criminal defense counsel serve different functions and the two should be coordinated, not substituted for each other.

What penalties are federal prosecutors seeking in ERC fraud cases?

Federal sentencing in fraud cases is driven primarily by the guidelines calculation, which for ERC fraud is anchored to the dollar amount of the fraudulent claim or the intended loss to the government. Large ERC refunds translate directly into higher guideline ranges. Additional enhancements apply for sophisticated schemes, multiple victims, abuse of a position of trust, and obstruction. The resulting advisory range can be substantial even for first-time offenders, and the government has shown no reluctance to seek significant sentences in these cases.

Will my business’s other employees be drawn into the investigation?

In many ERC fraud investigations, the government interviews bookkeepers, payroll administrators, HR personnel, and others who had access to the records used to support the claim. Employees are not targets initially, but their statements can become evidence against ownership. It is worth having counsel assess whether any employees need their own representation before they speak with investigators, particularly if they signed documents, processed payroll, or communicated with the promoter on the company’s behalf.

What if my ERC claim was partially legitimate and partially overstated?

Partial legitimacy is an important factual distinction in both the civil and criminal context. On the civil side, it determines how much must be repaid. On the criminal side, it bears on intent: a business that had some genuine qualifying basis for the credit but overstated the amount presents a different case than one that fabricated eligibility from scratch. How that distinction gets developed and presented is a core part of defense strategy, and it requires a detailed review of the underlying records before any position is taken with the government.

Can my professional license be affected by an ERC fraud charge or conviction?

For professionals licensed by New York State, including physicians, attorneys, accountants, contractors, and real estate professionals, a federal fraud conviction or even a plea to a related offense can trigger licensing board proceedings independent of the criminal case. New York’s licensing agencies monitor federal criminal dispositions and can initiate their own disciplinary process. This consequence needs to be factored into any plea negotiations or resolution strategy from the beginning, not after the criminal case has closed.

How long does a federal ERC fraud investigation typically last before charges are filed?

Federal fraud investigations are notoriously long. The statute of limitations for most federal fraud charges gives prosecutors several years from the date of the offense to bring charges, and IRS criminal investigations in complex tax fraud cases can run for two or three years before a grand jury indictment or a target letter is issued. The length of the investigation is not a signal that the case is going away. Prosecutors use the time to build airtight cases.

What happens if the promoter who filed my ERC claim is cooperating with the government?

Promoter cooperation is one of the most significant risk factors in ERC fraud cases. When the person who structured and filed the claim becomes a government witness, they can provide the government with communications, internal documents, and testimony about representations that were made during the process. Defense strategy in that scenario requires a thorough reconstruction of what was actually communicated, what the business owner understood and agreed to, and where the promoter’s narrative departs from the factual record.

ERC Fraud Defense Representation Across New York City and the Region

The Law Offices of Jason Goldman represents individuals and business owners facing ERC fraud investigations and federal criminal charges throughout the New York City metropolitan area and beyond. In Manhattan, the firm serves clients from Midtown, the Financial District, Tribeca, SoHo, the Upper East and West Sides, and East Harlem. In Brooklyn, representation extends across Downtown Brooklyn, Park Slope, Williamsburg, Greenpoint, Crown Heights, Bay Ridge, and Canarsie. The firm also serves clients in Queens neighborhoods including Astoria, Forest Hills, Flushing, Jamaica, and Long Island City, as well as clients in the Bronx from Riverdale through Fordham and Hunts Point. In Staten Island, the firm handles matters for clients in St. George, Tottenville, and the borough’s commercial corridors.

Beyond the five boroughs, this New York City ERC fraud attorney represents clients in Nassau County, including Garden City, Great Neck, and Hempstead, as well as Suffolk County communities from Hauppauge to Melville. Westchester County clients from White Plains, Yonkers, and New Rochelle regularly retain the firm on federal criminal matters. For cases arising in the Southern or Eastern Districts of New York that involve business owners from New Jersey, Connecticut, or other jurisdictions, the firm accepts representation on a case-by-case basis through pro hac vice admission.

New York City Employee Retention Credit Fraud Attorney – Contact The Law Offices of Jason Goldman

Federal ERC fraud cases move at the government’s pace, not yours, and every week that passes without legal representation is a week the prosecution’s theory develops without any counter-pressure. The Law Offices of Jason Goldman offers direct, substantive legal counsel for business owners and individuals who are facing scrutiny, audit, or criminal investigation related to Employee Retention Credit claims. As a New York City Employee Retention Credit fraud attorney with deep federal experience and a prosecutorial background, Jason Goldman provides the kind of representation that matches the seriousness of what federal investigators bring to these cases.

Reach out today to schedule a confidential consultation. The earlier in the process you get counsel involved, the more options remain available. Call the firm directly or send a message through the contact information on this site.